Rent sharing in the multi-fibre arrangement: theory and evidence from US apparel imports from Hong Kong

Refik Erzan (), Kala Krishna () and Ling Hui Tan

No 597, Policy Research Working Paper Series from The World Bank

Abstract: Available estimates of tariff equivalents of quotas and welfare calculations on the costs of multi-fibre arrangements (MFA) for developing countries are based on the premise of perfect competition in both product and license markets. It is also assumed that the exporting countries that administer the MFA quotas receive all the scarcity rents. The authors argue that, in the presence of market power on the buyers' side in the product markets combined with concentration in the license markets, the importing countries might retain part of this rent. Although the impact of imperfect competition on rent appropriation has been analyzed in literature, rent sharing has so far been ignored in both analytical and empirical work. This paper makes a theoretical case for rent sharing, and then analyzes U.S. imports of apparel products from Hong Kong. The authors find that rent sharing substantially affects the estimated magnitude of welfare losses that exporting developing countries suffer because of MFA quotas.

Keywords: Construction Industry; Common Carriers Industry; Food & Beverage Industry; General Manufacturing; Pulp & Paper Industry; Plastics & Rubber Industry; International Trade and Trade Rules; Trade and Services; Business Cycles and Stabilization Policies; Transport Services; Armed Conflict (search for similar items in EconPapers)
Date: 1991-02-28
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://documents.worldbank.org/curated/en/488401468771637074/pdf/multi0page.pdf (application/pdf)

Related works:
Journal Article: Rent Sharing in the Multi-fibre Arrangement: Theory and Evidence from U.S. Apparel Imports from Hong Kong (1994)
Working Paper: RENT SHARING IN THE MULTI-FIBRE ARRANGEMENT: THEORY AND EVIDENCE FROM US APPAREL IMPORTS FROM HONG KONG (1991)
Working Paper: Rent Sharing in the Multi-Fibre Arrangement: Theory and Evidence from US Apparel Imports from Hong Kong (1991)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:597

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().